The Regulatory Process and Regulatory Capture

These flashcards cover key concepts related to the regulatory process and regulatory capture as outlined in the lecture notes.

Regulation

Rules or standards set by agencies to implement laws and agency objectives.

Regulatory Capture

When regulatory agencies are dominated by the industries they are meant to regulate, leading to actions that benefit those industries instead of the public.

Public Choice Theory

A theory suggesting that political actors are self-interested and create rules that benefit themselves at a societal cost.

Bureaucrats

Non-elected officials responsible for implementing government functions and creating regulations.

Average Cost Pricing

A regulatory approach where the price is set based on the average production costs to ensure fair profit for producers.

Bootleggers and Baptists Theory

An explanation of regulatory coalitions between profit-driven groups (bootleggers) and ethical or moral supporters (Baptists) advocating the same regulatory measures.

Revolving Door

The movement of regulatory personnel to jobs in the industries they once regulated, creating potential conflicts of interest.

Stakeholder Input

Feedback collected from relevant parties in the regulatory process, which can influence the development of regulations.

Direct Subsidies

Financial support provided to firms in regulated industries to assist with operational costs.

Barriers to Entry

Obstacles that prevent new competitors from easily entering an industry, often created by existing firms to maintain market control.